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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4017 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 4017

 To amend the Internal Revenue Code of 1986 to impose a tax on the net 
         value of assets of a taxpayer, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 21, 2024

Ms. Warren (for herself, Mr. Sanders, Mr. Whitehouse, Mr. Merkley, Mr. 
Schatz, Mr. Markey, Ms. Hirono, and Mr. Welch) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to impose a tax on the net 
         value of assets of a taxpayer, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ultra-Millionaire Tax Act of 2024''.

SEC. 2. IMPOSITION OF WEALTH TAX.

    (a) In General.--The Internal Revenue Code of 1986 is amended by 
inserting after subtitle B the following new subtitle:

                       ``Subtitle B-1--Wealth Tax

               ``Chapter 18--Determination of Wealth Tax

               ``CHAPTER 18--DETERMINATION OF WEALTH TAX

``Sec. 2901. Imposition of tax.
``Sec. 2902. Net value of taxable assets.
``Sec. 2903. Special rules.
``Sec. 2904. Information reporting.
``Sec. 2905. Enforcement.

``SECTION 2901. IMPOSITION OF TAX.

    ``(a) In General.--In the case of an individual, a tax is hereby 
imposed on the net value of all taxable assets of the taxpayer on the 
last day of any calendar year.
    ``(b) Computation of Tax.--
            ``(1) In general.--The tax imposed by this section shall be 
        equal to the sum of--
                    ``(A) 0 percent of so much of the net value of all 
                taxable assets of the taxpayer as does not exceed the 
                zero bracket threshold,
                    ``(B) 2 percent of so much of the net value of all 
                taxable assets of the taxpayer in excess of the zero 
                bracket threshold but not in excess of the top bracket 
                threshold, plus
                    ``(C) the applicable percentage of so much of the 
                net value of all such taxable assets of the taxpayer in 
                excess of the top bracket threshold.
            ``(2) Zero bracket threshold; top bracket threshold.--For 
        purposes of this section--
                    ``(A) Zero bracket threshold.--The zero bracket 
                threshold is $50,000,000.
                    ``(B) Top bracket threshold.--The top bracket 
                threshold is $1,000,000,000.
    ``(c) Applicable Percentage.--
            ``(1) In general.--For purposes of this section, the 
        applicable percentage is--
                    ``(A) except as provided in subparagraph (B), 3 
                percent, and
                    ``(B) in the case of any calendar year in which 
                there is in effect legislation which meets the 
                requirements of paragraph (2), 6 percent.
            ``(2) Legislation described.--Legislation meets the 
        requirements of this paragraph if such legislation--
                    ``(A) establishes a health insurance program that 
                provides to all residents of the United States 
                comprehensive protection against the costs of health 
                care and health-related services, and
                    ``(B) prohibits private entities from providing 
                duplicate benefits.
    ``(d) Treatment of Married Individuals.--For purposes of this 
section, individuals who are married (as defined in section 7703) shall 
be treated as one taxpayer.
    ``(e) Treatment of Nongrantor Multibeneficiary Trusts.--
            ``(1) In general.--Any trust or portion of a trust which is 
        a nongrantor multibeneficiary trust shall be treated as an 
        individual to whom this chapter applies.
            ``(2) Computation of tax.--
                    ``(A) In general.--In applying this chapter to a 
                nongrantor multibeneficiary trust--
                            ``(i) the zero bracket threshold shall be 
                        equal to the sum of--
                                    ``(I) $0, plus
                                    ``(II) the lowest unused 0 percent 
                                bracket amount assigned to the trust by 
                                all beneficiaries of the trust, and
                            ``(ii) the top bracket threshold shall be 
                        equal to the sum of--
                                    ``(I) $0, plus
                                    ``(II) the lowest unused 2 percent 
                                bracket amount assigned to the trust by 
                                all beneficiaries of the trust.
                    ``(B) Unused 0 percent bracket amount.--For 
                purposes of this paragraph, the term `unused 0 percent 
                bracket amount' means, with respect to any beneficiary 
                for any calendar year, the lesser of--
                            ``(i) the excess (if any) of--
                                    ``(I) the zero bracket threshold, 
                                over
                                    ``(II) the sum of--
                                            ``(aa) the net value of all 
                                        taxable assets of the 
                                        beneficiary for the calendar 
                                        year, plus
                                            ``(bb) any unused 0 percent 
                                        bracket amount assigned by the 
                                        beneficiary to other nongrantor 
                                        multibeneficiary trusts, or
                            ``(ii) the portion of the net value of all 
                        taxable assets of the trust which such 
                        beneficiary is eligible to receive.
                    ``(C) Unused 2 percent bracket amount.--For 
                purposes of this paragraph, the term `unused 2 percent 
                bracket amount' means, with respect to any beneficiary 
                for any calendar year, the lesser of--
                            ``(i) the excess (if any) of--
                                    ``(I) the top bracket threshold 
                                reduced by the zero bracket threshold, 
                                over
                                    ``(II) the sum of--
                                            ``(aa) the net value of all 
                                        taxable assets of the 
                                        beneficiary for the calendar 
                                        year in excess of the zero 
                                        bracket threshold, plus
                                            ``(bb) any unused 2 percent 
                                        bracket amount assigned by the 
                                        beneficiary to other nongrantor 
                                        multibeneficiary trusts, or
                            ``(ii) the portion of the net value of all 
                        taxable assets of the trust which such 
                        beneficiary is eligible to receive.
                    ``(D) Assignment of amounts.--The assignment of any 
                amount of unused 0 percent bracket amount and unused 2 
                percent bracket amount shall be made at such time and 
                in such manner as specified by the Secretary in 
                regulations. In any case in which no affirmative 
                assignment is made by a beneficiary, the amount 
                assigned shall be $0.
            ``(3) Nongrantor multibeneficiary trust.--For purposes of 
        this chapter--
                    ``(A) In general.--The term `nongrantor 
                multibeneficiary trust' means any trust or portion of a 
                trust--
                            ``(i) with respect to which no person is 
                        treated as an owner under subpart E of 
                        subchapter J of chapter 1,
                            ``(ii) no property of which is attributable 
                        to a gratuitous transfer of assets by a person 
                        who is subject to tax under this chapter for 
                        the calendar year, and
                            ``(iii) which has more than one beneficiary 
                        (determined as of the last day of the calendar 
                        year).
                    ``(B) Exception.--Such term shall not include--
                            ``(i) any trust described in section 401(a) 
                        and exempt from tax under section 501(a),
                            ``(ii) any trust all of the unexpired 
                        interests in which are devoted to one or more 
                        of the purposes described in section 
                        170(c)(2)(B),
                            ``(iii) any charitable lead annuity trust 
                        (as defined in section 2642(e)(3)) or 
                        charitable lead unitrust, or
                            ``(iv) any charitable annuity remainder 
                        trust (as defined in section 664(d)(1)) or any 
                        charitable remainder unitrust (as defined in 
                        section 664(d)(2)).
                    ``(C) Beneficiary.--The term `beneficiary' shall 
                not include any person whose interest in a trust is 
                contingent on the death of another person with an 
                interest in such trust.

``SEC. 2902. NET VALUE OF TAXABLE ASSETS.

    ``(a) In General.--For purposes of this subtitle, the term `net 
value of all taxable assets' means, as of any date, the value of all 
property of the taxpayer (other than property excluded under subsection 
(b)), real or personal, tangible or intangible, wherever situated, 
reduced by any debts (including any debts secured by property excluded 
under subsection (b)) owed by the taxpayer.
    ``(b) Exclusion for Certain Assets.--Property of the taxpayer shall 
not be taken into account under subsection (a) if such property--
            ``(1) has a value of $50,000 or less (determined without 
        regard to any debt owed by the taxpayer with respect to such 
        property),
            ``(2) is tangible personal property, and
            ``(3) is not property--
                    ``(A) which is used in a trade or business of the 
                taxpayer,
                    ``(B) in connection with which a deduction is 
                allowable under section 212, or
                    ``(C) which is a collectible as defined in section 
                408(m), a boat, an aircraft, a mobile home, a trailer, 
                a vehicle, or an antique or other asset that maintains 
                or increases its value over time (within the meaning of 
                section 5.02(2) of Revenue Procedure 2018-08).
    ``(c) Rules for Determining Property of the Taxpayer.--For purposes 
of this subtitle--
            ``(1) Property included in estate.--Any property that would 
        be included in the estate of the taxpayer if the taxpayer died 
        shall be treated as property of the taxpayer.
            ``(2) Inclusion of certain gifts.--Any property transferred 
        by the taxpayer after the date of the enactment of this 
        chapter, to an individual who is a member of the family of the 
        taxpayer (as determined under section 267(c)(4)) and has not 
        attained the age of 18 shall be treated as property of the 
        taxpayer for any calendar year before the year in which such 
        individual attains the age of 18.
            ``(3) Attribution of property held by trusts.--
                    ``(A) Grantor trusts.--If an individual is treated 
                as the owner of any portion of a trust under subpart E 
                of subchapter J of chapter 1, property attributable to 
                such trust or portion of the trust shall be treated as 
                property of the individual and not as property of the 
                trust.
                    ``(B) Nongrantor trusts.--
                            ``(i) In general.--In the case of a trust 
                        or portion of a trust which is not described in 
                        subparagraph (A), any property which is 
                        attributable to a gratuitous transfer of assets 
                        by an individual who is subject to tax under 
                        this chapter for the calendar year shall be 
                        treated as property of such individual and not 
                        as property of the trust.
                            ``(ii) Other trusts.--
                                    ``(I) In general.--In the case of 
                                any trust or portion of a trust which 
                                is described in subclause (II), the 
                                property of such trust shall be treated 
                                as the property of the beneficiary of 
                                such trust and not as the property of 
                                the trust.
                                    ``(II) Trusts to which this 
                                subclause applies.--A trust is 
                                described in this subclause if such 
                                trust not described in subparagraph 
                                (A), the assets of such trust are not 
                                attributable to a gratuitous transfer 
                                of assets by a person who is subject to 
                                tax under this chapter for the calendar 
                                year, and such trust has a single 
                                beneficiary (determined as of the last 
                                day of the calendar year).
                    ``(C) Right of recovery.--
                            ``(i) In general.--If any part of the net 
                        value of taxable assets of an individual on 
                        which tax has been paid consists of the value 
                        of property held by a trust which is included 
                        in the net value of taxable assets of such 
                        individual by reason of subparagraph (B), then 
                        such individual shall be entitled to recover 
                        from the trust the amount which bears the same 
                        ratio to the recoverable amount as--
                                    ``(I) the value of such property, 
                                bears to
                                    ``(II) the net value of taxable 
                                assets of the taxpayer.
                            ``(ii) Recoverable amount.--For purposes of 
                        clause (i), the recoverable amount with respect 
                        to any trust is the excess of--
                                    ``(I) the tax imposed under this 
                                chapter for the calendar year on the 
                                individual, over
                                    ``(II) the amount of such tax which 
                                would be imposed for such calendar year 
                                on such individual if no property held 
                                by such trust were included in the net 
                                value of taxable assets of the 
                                individual.
                            ``(iii) Treatment where no recovery.--In 
                        any case where a trust does not reimburse any 
                        taxpayer as provided in clause (i), the 
                        taxpayer shall be treated for purposes of this 
                        chapter as having made a gratuitous transfer to 
                        the trust in an amount equal to the amount 
                        determined under clause (i). Such transfer 
                        shall be treated as having been made on the 
                        last day of the calendar year for which the tax 
                        under subsection (a) was due.
            ``(4) Treatment of assets held by certain split-interest 
        trusts.--
                    ``(A) Remainder interests in charitable remainder 
                annuity trusts and charitable remainder unitrusts.--In 
                the case of any charitable remainder annuity trust (as 
                defined in section 664(d)(1)) or of a charitable 
                remainder unitrust (as defined in section 664(d)(2))--
                            ``(i) the present value of any remainder 
                        interest shall not be taken into account under 
                        subsection (a), and
                            ``(ii) the present value of any other 
                        interests shall be taken in account under 
                        subsection (a), in accordance with regulations 
                        promulgated by the Secretary, as the property 
                        of the beneficiaries of such interests.
                    ``(B) Charitable lead annuity trusts and charitable 
                lead unitrusts.--In the case of a charitable lead 
                annuity trust (as defined in section 2642(e)(3)) or a 
                charitable lead unitrust--
                            ``(i) the present value of any interest 
                        described in section 2522(c)(2)(B) shall not be 
                        taken into account under subsection (a), and
                            ``(ii) notwithstanding paragraphs (A) and 
                        (B) of paragraph (3), the present value of any 
                        remainder interest shall be taken into account 
                        under subsection (a), in accordance with 
                        regulations promulgated by the Secretary, as 
                        the property of the beneficiaries of such 
                        remainder interest.
    ``(d) Establishment of Valuation Rules.--Not later than 12 months 
after the date of the enactment of this section, the Secretary shall 
establish rules and methods for determining the value of any asset for 
purposes of this subtitle, including rules for the valuation of assets 
that are not publicly traded or that do not have a readily 
ascertainable value. Such rules and methods--
            ``(1) may utilize retrospective and prospective formulaic 
        valuation methods not currently in use by the Secretary,
            ``(2) may require the use of formulaic valuation approaches 
        for designated assets, including formulaic approaches based on 
        proxies for determining presumptive valuations, formulaic 
        approaches based on prospective adjustments from purchase 
        prices or other prior events, or formulaic approaches based on 
        retrospectively adding deferral charges based on eventual sale 
        prices or other specified later events indicative of valuation, 
        and
            ``(3) may address the use of valuation discounts.

``SEC. 2903. SPECIAL RULES.

    ``(a) Deceased Individuals.--
            ``(1) In general.--In the case of any individual who dies 
        during a calendar year and who is not married on the date of 
        such individual's death--
                    ``(A) section 2901(a) shall be applied by 
                substituting `the date of the individual's death' for 
                `the last day of the calendar year', and
                    ``(B) the amount of the tax imposed under such 
                section shall be reduced by an amount which bears the 
                same ratio to such amount (determined without regard to 
                this subsection) as--
                            ``(i) the number of days in the calendar 
                        year after the date of the individual's death, 
                        bears to
                            ``(ii) 365.
            ``(2) Coordination with estate tax.--For purposes of 
        section 2053, the tax imposed by this section for the year of 
        the decedent's death shall be considered to have been imposed 
        before such death.
    ``(b) Application to Non-Residents.--In the case of any individual 
who is a non-resident and not a citizen of the United States, this 
subtitle shall apply only to the property of such individual which is 
situated in the United States (determined under rules similar to the 
rules under subchapter B of chapter 11).
    ``(c) Application to Covered Expatriates.--In the case of an 
individual who is a covered expatriate (as defined in section 877A), 
section 2901(a) shall be applied--
            ``(1) as if the calendar year ended on the day before the 
        expatriation, and
            ``(2) as if the rate of tax under both subparagraphs (A) 
        and (B) of section 2901(b)(1) were 40 percent.

``SEC. 2904. INFORMATION REPORTING.

    ``(a) In General.--Not later than 12 months after the date of the 
enactment of this section, the Secretary shall by regulations require 
the reporting of any information concerning the net value of assets 
appropriate to enforce the tax imposed by this chapter.
    ``(b) Method of Reporting.--The Secretary shall, where appropriate, 
require the reporting made under subsection (a) to be made as a part of 
existing income reporting requirements (including requirements under 
chapter 4 (relating to taxes to enforce reporting on certain foreign 
accounts)).
    ``(c) Responsibility for Reporting.--The Secretary may impose 
reporting obligations by reference to the ownership, control, 
management, claim to income from, or other relationship to assets and 
liabilities for purposes of administering the tax imposed by this 
section and may impose such obligations on financial institutions, 
business entities, or other persons, including requiring business 
entities to provide estimates of the value of the entity itself.

``SEC. 2905. ENFORCEMENT.

    ``The Secretary shall annually audit not less than 30 percent of 
taxpayers required to pay the tax imposed under this chapter.''.
    (b) No Deduction From Income Taxes.--Section 275 of the Internal 
Revenue Code of 1986 is amended by inserting after paragraph (6) the 
following new paragraph:
            ``(7) Taxes imposed by chapter 18.''.
    (c) Extension of Time for Payment of Tax.--
            (1) In general.--Section 6161(a) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(3) Wealth tax.--
                    ``(A) In general.--In the case of taxpayer 
                described in subparagraph (B), the Secretary may extend 
                the time for payment of the tax imposed under chapter 
                18 for a reasonable period not to exceed 5 years from 
                the date fixed for the payment thereof.
                    ``(B) Taxpayers described.--A taxpayer is described 
                in this subparagraph if such the Secretary determines--
                            ``(i) the taxpayer has severe liquidity 
                        constraints, or
                            ``(ii) immediate payment would cause undue 
                        hardship on an ongoing enterprise.''.
            (2) Rules.--Not later than 12 months after the date of the 
        enactment of this Act, the Secretary of the Treasury (or the 
        Secretary's delegate) shall establish rules for the application 
        of the amendments made by paragraph (1).
    (d) Application of Accuracy Related Penalties.--
            (1) In general.--Section 6662(b) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(10) Any substantial wealth tax valuation 
        understatement.''.
            (2) Substantial wealth tax understatement.--Section 6662 of 
        such Code is amended by adding at the end the following new 
        subsection:
    ``(m) Application to Substantial Wealth Tax Valuation 
Understatement.--
            ``(1) Substantial wealth tax valuation understatement 
        defined.--
                    ``(A) In general.--For purposes of this section, 
                there is a substantial wealth tax valuation 
                understatement if the value of any property claimed on 
                any return of tax imposed by subtitle B-1 is 65 percent 
                or less of the amount determined to be the correct 
                amount of such valuation.
                    ``(B) Limitation.--No penalty shall be imposed by 
                reason of subsection (b)(10) unless the portion of the 
                underpayment attributable to substantial wealth tax 
                valuation understatements for the calendar year exceeds 
                $5,000.
            ``(2) Increased penalty.--
                    ``(A) In general.--In the case of any portion of an 
                underpayment which is attributable to one or more 
                substantial wealth tax valuation understatement, 
                subsection (a) shall be applied--
                            ``(i) in the case of a substantial wealth 
                        tax valuation understatement which is a gross 
                        wealth tax valuation misstatement, by 
                        substituting `50 percent' for `20 percent', and
                            ``(ii) in any other case, by substituting 
                        `30 percent' for `20 percent'.
                    ``(B) Gross wealth tax valuation misstatement.--For 
                purposes of subparagraph (A), the term `gross wealth 
                tax valuation misstatement' means a substantial wealth 
                tax valuation understatement, as determined under 
                paragraph (1) by substituting `40 percent' for `65 
                percent'.''.
    (e) Clerical Amendment.--The table of subtitles of such Code is 
amended by inserting after the item relating to subtitle B the 
following new item:

                     ``Subtitle B-1--Wealth Tax''.

    (f) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after December 31, 2024.
    (g) Periodic Reports.--Not later than January 1, 2027, and every 2 
years thereafter, the Secretary of the Treasury (or the Secretary's 
delegate) shall submit to Congress a report on the tax imposed under 
chapter 18 of the Internal Revenue Code of 1986 (as added by this Act), 
including any issues related to the administration and enforcement of 
such tax.

SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS.

    (a) Regulatory Authority.--The Secretary of the Treasury (or the 
Secretary's delegate) may issue such rules and regulations as necessary 
to prevent taxpayers from avoiding the purpose of information reporting 
requirements under the Internal Revenue Code of 1986 by placing assets 
in any foreign corporation, partnership, or trust in which the taxpayer 
holds directly or indirectly, a significant interest as the sole or 
principal owner or the sole or principal beneficial owner.
    (b) FATCA Enforcement Plan.--The Secretary of the Treasury (or the 
Secretary's delegate) shall develop a comprehensive plan for managing 
efforts to leverage data collected under chapter 4 of the Internal 
Revenue Code of 1986 in agency compliance efforts. Such plan shall 
include an evaluation of the extent to which actions being undertaken 
as of the date of the enactment of this Act for the enforcement of the 
requirements of such chapter improve voluntary compliance and address 
noncompliance with such requirements.

SEC. 4. INTERNAL REVENUE SERVICE FUNDING.

    (a) In General.--Subchapter A of chapter 80 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 7813. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to the Secretary for the 
period of fiscal years 2024 through 2034--
            ``(1) for enforcement of this title, $70,000,000,000,
            ``(2) for taxpayer services, $10,000,000,000, and
            ``(3) for business system modernization, 
        $20,000,000,000.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 80 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

``Sec. 7813. Authorization of appropriations.''.
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